Both taxpayers and Northern Rock depositors will be protected as the troubled bank's future is mulled, Alistair Darling has pledged.

The Chancellor said any proposals for the future of the Newcastle-based company will have to be approved by the Government and can be vetoed by ministers.

In a Commons statement, he told MPs that the billions of pounds loaned by the Bank of England - believed to be around £25 billion - were secured against "high quality" assets held by Northern Rock.

Mr Darling vowed: "The Government has a clear duty to protect the public interest and we will do that."

But shadow chancellor George Osborne said the "fall out from the first bank run in 140 years gets worse each week" and accused the Chancellor of "another day of weakness and confusion".

He demanded: "The question we now ask of you is simple. Have you been honest with taxpayers about the risks they face and have you told the whole truth?"

Earlier, it emerged that bids for the beleaguered mortgage-lender are being pitched "materially low".

Shares in the company tumbled over 20 per cent to 103.4p from Friday's 132.6p on the news, valuing the bank at about £440 million.

Neither Northern Rock or its interested parties have disclosed how much money the lender was forced to borrow from the Bank of England in September.

Northern Rock was forced to go cap in hand to the Bank as the global squeeze on credit markets caused the mortgage lender's funding strategy to collapse.

Last Friday was set by Northern Rock's advisers as a deadline for expressions of interest. It is said to have received interest "covering a range of options" and expects more proposals in coming days.

One of the bids came from a consortium led by Richard Branson's Virgin Group, while another proposal has been lodged by former Abbey National chief Luqman Arnold to stabilise the bank and restore its finances.

Northern Rock's shares have dropped over 80 per cent since it went to the Bank of England for emergency funding in mid-September, and are down over 90 per cent this year.

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